Insolvency and Liquidation

 

 

 

If you’re under debt review and need a loan, it’s not possible to get approved for one as this is prohibited in accordance with the National Credit Act. This is not to make life more difficult for you, but to help you regain control of your finances. 
If you are able to continue accumulating credit and taking loans during the debt review process, your debt will unfortunately spiral out of control, and you won’t be able to make the committed repayments. 

The period varies according to how quickly you can pay off all your debts. The process can last for just a few months, or up to 60 months. Alternatively, if you’re no longer over-indebted and can resume normal repayments, we can begin the debt review removal process for you by applying for an order to rescind your debt review status. 
It’s important to note that debt counselling is not the same as blacklisting. Any record of you being under debt review is removed from your credit record once you’ve completed the process successfully. 

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Debt Review offers significant advantages, including:

  • Legal Protection: Immediately protects you from legal action, harassment, and asset repossession by creditors once you enter the process.
  • Reduced Monthly Installments: Your Debt Counsellor negotiates with creditors to reduce your monthly repayments to an affordable amount.
  • Lower Interest Rates: We strive to negotiate lower interest rates and fees on your debts.
  • Debt Consolidation: All your debts are consolidated into a single, manageable monthly payment.
  • Structured Repayment Plan: You receive a clear, legally binding repayment plan to become debt-free.
  • Peace of Mind: Reduces stress and anxiety associated with overwhelming debt.
  • Credit Record Clearance: Once you complete your repayment plan, we assist with clearing the Debt Review listing from your credit record.
  • Asset Protection: Debt Review can help protect your assets, such as your home and car, from being repossessed, as long as you adhere to the Court-Ordered repayment plan.
     

It's important to be aware of the potential considerations:

  • No New Credit: You cannot apply for new credit while under Debt Review until you receive a Clearance Certificate.
  • Debt Review Listing: You will be listed as under Debt Review at Credit Bureaus (though this is removed upon completion).
  • Fees: Debt Counselling and Debt Review involve legally regulated fees (which we will fully explain upfront).
  • Longer Repayment Period (Potentially): While monthly payments are lower, it may take longer to repay your debts overall.
  • Commitment Required: Success requires commitment to the repayment plan and open communication with your Debt Counsellor at Aucamp

Anyone can apply for debt review, but to be accepted you need to meet the following criteria: 

  • You must be a South African citizen between the ages of 18 and 65 with a valid South African ID. 
  • You must be over-indebted. That means you’re not able to cover your essential living expenses and monthly debt repayments from your income. 
  • You must be employed and able to make monthly repayments while under debt review. 
     
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Debt Review, also known as Debt Counselling

Entering debt review is a significant step towards financial freedom, engaging a formal legal process designed to restructure your debt.  It's not just about paperwork; it demands expertise and a deep understanding of the legal landscape.  While Debt Rescue, when handled correctly, can be transformative,  the truth is, not all registered debt counsellors possess the necessary skill and experience to navigate its complexities effectively.  Aucamp Attorneys brings the legal depth and experienced debt review specialists you require to ensure you receive truly capable representation throughout this crucial process.

What is Debt Review?

Legally defined by the National Credit Act in South Africa, Debt Review is a formal process offering a legal solution for over-indebted consumers.  It's more than just debt counselling; it's a structured legal procedure where a Debt Counsellor, as legally mandated,  assesses your debt and proposes a restructured repayment plan to your creditors.  Crucially, Debt Review can lead to a Court Order, legally binding your creditors to the agreed repayment plan and providing you with legal protection from further action as long as you comply.

A Guide to Financial Relief

Debt Review is a structured legal process designed to assist over-indebted South Africans in regaining control of their finances. At Aucamp Attorneys, we understand that navigating this process can feel overwhelming. That's why we've simplified the steps, ensuring you're informed and supported every step of the way.  Here’s what you can expect when you choose Aucamp Attorneys to guide you through debt review:

Step 1:  Confidential Debt Assessment – Understanding Your Situation 

  • Asessment The first step is understanding where you stand financially. 
  •  You'll begin by working through debt assessment form. This allows you to securely provide us with the essential details of your financial situation in the comfort of your own home.
  • Expert Initial Analysis by using the information you provide, combined with data from registered Credit Bureaus, our experienced Debt Counsellors at Aucamp Attorneys will conduct an initial assessment to determine if you are indeed over-indebted and if debt review is the appropriate solution for you.
  • Honesty is Key For us to provide the most accurate and beneficial assessment, it’s crucial that you are completely honest and transparent when completing the assessment form. Your trust and accurate information are the foundation of a successful debt review process.

Step 2: Formal Notification to Credit Providers – Initiating Legal Protection 

  • Official Notification Once you decide to proceed, Aucamp Attorneys will formally notify all your Credit Providers and the Credit Bureaus of your application for Debt Review. This is a crucial step, initiating your legal protection under the National Credit Act. We utilize the official Form 17.1 for this legal notification.
  • Debt Verification and Negotiation Begins We immediately begin the process of verifying your debt balances with your Credit Providers and initiating negotiations for more manageable repayment terms.
  • Credit Bureau Listing (Temporary and Protective) You will be listed with Credit Bureaus as being under Debt Review. This listing is not permanent negativity; it’s a protective measure. It prevents further credit from being granted and signals to creditors that you are actively addressing your debt through a legal process. This listing remains until your debt is repaid and a Clearance Certificate is issued.
  • Interim Payment Plan Activated Simultaneously, an interim payment plan is established through a registered Payment Distribution Agency (PDA). This plan provides a structured starting point for your repayments while negotiations are underway.
  • Commence Interim Payments To demonstrate your commitment and uphold your obligations within the debt review process, you will need to commence payments in line with this interim repayment plan. This shows good faith and is an important aspect of the legal process.

Step 3: Formal Over-Indebtedness Confirmation & Debit Order Management 

  • Credit Provider Balance Confirmation  Credit Providers formally confirm your outstanding balances, allowing for accurate debt restructuring. Aucamp Attorneys will then issue a Form 17.2, officially notifying Credit Providers and Credit Bureaus of our formal determination that you are over-indebted. This is a key legal step solidifying your position in the debt review process.
  • Strategic Debit Order Cancellation To ensure the smooth implementation of your interim repayment plan and to prevent payments outside of the debt review framework, it’s essential to cancel existing debit orders for debt repayments only. This allows the interim repayment plan, managed through the PDA, to take effect and ensures all payments are correctly tracked and distributed within the legal framework of debt review.
  • Taking Control By cancelling old debit orders and adhering to the interim plan, you are actively taking control of your finances and demonstrating your commitment to the debt review process.

Step 4: Finalizing Your Legally Sound Repayment Plan – Working Towards Sustainability 

  • Negotiation and Plan Finalization This is where Aucamp Attorneys' expertise in negotiation becomes crucial. We actively engage with your Credit Providers to finalize a repayment plan that is both sustainable for you and acceptable to your creditors. Credit Providers will either formally accept or propose amendments to our initial proposal.
  • Tailored and Affordable Plan Our goal is to create a repayment plan that significantly reduces your monthly installments, potentially lowers interest rates, and extends repayment terms where necessary, making your debt obligations truly manageable.
  • PDA Integration for Simplified Payments Once the plan is finalized, it is submitted to your chosen Payment Distribution Agency (PDA). The PDA will then manage the collection of a single monthly payment from you and distribute it proportionally to all your Credit Providers according to the agreed plan. This simplifies your financial administration considerably.
  • Monthly Payment Confirmation You'll receive a monthly SMS notification from the PDA, providing clear confirmation of your payment distribution, ensuring transparency and peace of mind.
  • Court Application Preparation & Affidavit Signing With a finalized and agreed-upon plan, we proceed to finalize your Debt Counselling Court application. You will be requested to sign an Affidavit – this is a standard legal requirement within the Debt Review process, and you should not be concerned. It’s a formal affirmation of your situation, and Aucamp Attorneys will fully guide you through this process, ensuring you understand everything you are signing. Remember, the law is designed to protect you as long as you follow the process diligently.

Step 5: Court Order & Ongoing Legal Protection – Securing Your Financial Future 

  • Securing Your Court Date Aucamp Attorneys will obtain a Court date to formally present your Debt Review repayment plan to the Magistrate's Court for legal approval. This typically occurs after the initial 60-day negotiation period.
  • Legal Approval and Binding Agreement The aim of the Court appearance is to obtain a legally binding Court Order that formally approves your Debt Review plan. This Court Order solidifies the agreement with your Credit Providers and provides you with significant legal protection.
  • Continued Payment, Continued Protection As long as you consistently maintain your payments according to the Court-Ordered plan, you are legally protected from further creditor action, including legal action, harassment, and repossession of assets covered under the debt review.
  • Ongoing Support and Monitoring Aucamp Attorneys will continue to monitor your Debt Review process, providing ongoing guidance and support every step of the way. We are your dedicated legal partners throughout this journey.
  • Your Continued Role Your primary responsibility is to continue making your payments as per the Court-Ordered plan. For any queries or communication from Credit Providers, simply refer them to Aucamp Attorneys – we will handle all creditor communication on your behalf.
  • Court Order Formalizing Your Path to Debt Freedom: The Court Order is the culmination of the initial Debt Review process. It legally confirms your repayment plan, providing a clear, structured, and legally protected pathway to becoming debt-free. It is essential to maintain consistent payments to realize the full benefits of the Debt Review and achieve lasting financial stability.

Need Help

Throughout the Debt Review process with Aucamp Attorneys, remember you are not alone. We provide expert legal guidance, dedicated support, and a clear roadmap to navigate your journey towards financial freedom. Contact us for guidance when you are ready to start.